FORWARD-LOOKING STATEMENTS
This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Set forth below are certain of our important accounting policies. For a full
explanation of these and other of our important accounting policies, see Note 2
to Notes to the Financial Statements in our Form 10-K filed with the
Going Concern Considerations
Our financial statements are presented in
On
We have generated no revenues to date and have an accumulated deficit of
Our Company's plan of action over the next twelve months is to raise capital.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with accounting principles
generally accepted in
Derivative Financial Instruments
We account for convertible debt with conversion features representing embedded derivative liabilities in accordance with ASC 815, Derivatives and Hedging. ASC 815-15-25-1 requires that embedded derivative instruments be bifurcated and assessed on their issuance date and measured at their fair value for accounting purposes. In determining the appropriate fair value, we use the Black-Scholes option valuation method, resulting in a reduction of the initial carrying amount of the notes as unamortized debt discount. The unamortized discount is amortized over the term of each note using the effective interest method.
14
The fair value of derivative instruments is recorded and shown separately under liabilities. Changes in the fair value of derivative liabilities are recorded in the consolidated statement of operations under non-operating income (expense).
We evaluate each of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, we use a weighted average Black-Scholes-Merton option-pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date.
Recent Accounting Pronouncements
We review new accounting standards as issued. Although some of these accounting standards issued or effective after the end of our previous fiscal year may be applicable to us, we have not identified any standards that we believe merit further discussion. We believe that none of the new standards will have a significant impact on our financial position, future operations or cash flows.
RESULTS OF OPERATIONS
We have limited operational history. From our inception on
Three Months Ended
Operating Expenses
During the three months ended
Other Income and Expense
Interest expense increased
Net Loss
Our net loss for the three months ended
Six Months Ended
Operating Expenses
During the six months ended
15 Other Income and Expense
Interest expense increased
Net Loss
Our net loss for the three months ended
LIQUIDITY AND CAPITAL RESOURCES
Since inception we have raised capital through debt financing, advances from related parties and private placements of our common stock. Our capital commitments for the coming 12 months consist of administrative expenses, expenses associated with investment in companies, and costs of distribution of our securities. We estimate that we will have to incur the following expenses during the next 12 months:
Estimated Estimated Expenses Description Completion Date (1) ($)
Legal and accounting fees and expenses(2) 12 months 95,000 Investor relations and capital raising 12 months 125,000 General and administrative expenses
12 months 207,000 Transfer Agent and Edgar Services 12 months 18,000 Investment in companies 12 months 600,000 Total 1,045,000 (1) Budget Items are listed in order of priority. (2) Includes$45,000 for accounting and auditing.
Since our initial share issuances, our company has been unable to raise
additional capital forcing us to rely on debt financing and cash advances from
related parties to meet current and future liabilities over the foreseeable
future. Based on our cash on hand of
We have no plant or significant equipment to sell, nor are we going to buy any plant or significant equipment during the next 12 months. We do not presently intend to hire any employees.
16 CASH FLOWS Operating Activities
During the six months ended
Investing Activities
There were no investing activities in the 2021 period. During the six months
ended
Financing Activities
There were no financing activities in the comparable 2021 period. During the six
months ended
Trends
Other than potential impacts of Covid-19, we are unaware of any known trends,
events or uncertainties that have had, or are reasonably likely to have, a
material impact on our business or income, either in the long term or short
term, other than as described in this section or our in Item 1A of our Form 10-K
(Risk Factors) filed
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.
Inflation
The effect of inflation on our revenues and operating results has not been significant.
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